Your savings are no longer making you money

You're doing something considered good by saving, but you're actually ending up worse off.

October 26, 2025

In September, the UK inflation rate rose to 3.8%
That means compared to September 2024 things are 3.8% more expensive

But in August 2025 the Bank of England cut the base rate to 4%
That means non fixed savings account cut their interest rates

While now more interest rate cuts are expected in November
A lot of savings accounts are now offering interest that is LESS than inflation

In fact, Which? found that more than half of the savings accounts on the market right now are offering rates lower than inflation.

That means that even if you’re making money on your savings, they still can’t afford to buy you the same basket of goods as before you saved anything, because the price of that basket of goods is rising at a higher rate.

You’re doing something good by saving but you’re actually ending up worse off.

How do you beat inflation then?

  1. Find savings accounts that offer higher interest rates than inflation. This article from Which? » highlights what some of them are

  2. Consider whether you want to fix some of your savings so you’re guaranteed an interest rate that doesn’t fall if another cut happens. This article from Money Supermarket » explains the different savings accounts options available right now including the best fixed rate savings accounts out there. 

  3. Investing. Historically long term investing has provided higher returns than saving and, depending on the investments, higher returns than inflation. This is one of many reasons why finance experts are pro investing. But the truth is investing is a lot more nuanced and returns aren’t guaranteed. You can get my Investment Initiator guide here.

But the first step before you move any money around is your One Simple Step this week

Find out what your interest rates on your savings are right now

It might be that you’re already in a high interest savings account and therefore outdoing inflation.
But it never hurts to be proactive with your money.

To financially thriving, not just surviving,
Pernia | Your Finance Travel Buddy